00:01
So here we're talking producer surplus, right? and remember that the producer surplus is the difference between price and marginal cost, right? that's the whole idea.
00:16
And the idea here is that the price has going up.
00:20
And this farmer's cost is unaffected, right? and then we are thinking about summing this difference over all q.
00:35
For example, when i draw a market, right, and i draw demand and supply, right, the amount of producer surplus would be the difference between price and supply summed up over all units.
00:50
So this is also fixed, right? we're told that both of these things are unaffected.
00:56
So from the perspective of this one farmer, right, this farmer is clearly going to get more producer surplus.
01:06
They get a higher price.
01:09
They don't have to pay any more costs, and they sell and grow just the same quantity...